Prima facie case for rebate and Cenvat credit leads to waiver of pre-deposit and stay of recovery.

A strong prima facie case was found for waiver of pre-deposit and stay against recovery of Cenvat credit, rebate, interest and penalty. Duty had been paid in the prescribed manner through Cenvat credit and cash, with no procedural lapse in the rebate claim, and the denial of credit rested only on the contention that the assessee was not a manufacturer. The order noted that the payment created a revenue-neutral situation and relied on precedent indicating that rebate may be admissible where duty was in fact paid, even if not otherwise payable. Pre-deposit was waived and recovery stayed during the pendency of the appeals.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay against recovery in respect of demand of Cenvat credit, rebate, interest and penalty.

Analysis: The order records that the duty had been paid in the prescribed manner, including payment through Cenvat credit and cash, and that there was no procedural lapse in claiming rebate. The denial of credit was based only on the contention that the appellant was not a manufacturer, while the order noted that the duty payment had resulted in a revenue neutral situation. It further noted that precedent had taken the view that rebate may be admissible even where duty was not otherwise payable if duty had in fact been paid. On that basis, the appellants were found to have a strong prima facie case.

Conclusion: Pre-deposit of dues was waived and recovery stayed during pendency of the appeals, in favour of the appellants.

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